Income Taxes

For the three month periods ended October 1, 2016 and October 3, 2015, we recorded an income tax benefit of $2.5 million and an insignificant income tax provision, respectively. For the nine month periods ended October 1, 2016 and October 3, 2015, we recorded an income tax benefit of $2.5 million and an income tax provision of $0.3 million, respectively. The income tax benefit recognized for the three and nine month periods ended October 1, 2016 resulted primarily from the reversal of previously accrued liabilities for uncertain tax positions due to the lapsing of statute of limitations. The income tax provisions recorded in the three and nine month periods ended October 3, 2015, resulted from foreign income taxes.

In accordance with ASC Topic 740, Income Taxes ("ASC 740"), we had unrecognized tax benefits of $17.4 million as of December 31, 2015. This amount has been reduced by the $2.4 million reversal recorded in the three month period ended October 1, 2016. We continue to recognize interest and penalties as a component of the income tax provision. If we are able to eventually recognize these uncertain tax positions, $15.0 million of our unrecognized benefit would reduce the effective tax rate. Over the next twelve months, we expect an insignificant decline in liabilities associated with our uncertain tax positions as a result of expiring statutes of limitations.

We currently have a full valuation allowance against our U.S. net deferred tax asset. We continue to monitor the relative weight of positive and negative evidence of future profitability in relevant jurisdictions. As of October 1, 2016, we have determined that the following negative evidence outweighs the positive evidence such that it is not more likely than not that we will generate sufficient taxable income in the relevant jurisdictions to utilize our deferred tax assets and release the associated valuation allowance:


•	Net loss for the years ending December 31, 2015, 2014 and 2013


•	Movement of certain product manufacturing to Singapore, resulting in reduced U.S. taxable income,


•	Inherent earnings volatility of our industry resulting in our inability to forecast long term earnings, and


•	Usage limitations resulting in a longer period being required to realize our deferred tax assets.

As a result of our analysis, we concluded that it is more likely than not that, as of October 1, 2016, our net deferred tax assets will not be realized, with the exception of those in Japan. Therefore, we continue to provide a full valuation allowance against net deferred tax assets outside of Japan. We closely monitor available evidence, and as noted above, may release some or all of the valuation allowance in future periods.

We are subject to federal and state tax examinations for years 1999 forward by virtue of the tax attributes carrying forward from those years. We are also subject to audits in the foreign jurisdictions in which we operate for years

2003 and forward. There are no material income tax audits currently in progress as of October 1, 2016.